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Gazprom strategy: swapping dollar bonds for gas pipelines

Who said they are not ditching the dollar? Like Rats from a sinking ship. Once the dollar goes, America goes. Then 320M screaming - "what about me?" - as the Welfare Checks end and the Bankers foreclose. The Gas stations close and the stores empty. Over 3 days before the looting and shooting starts. This may not end well. If America tanks, invasion will be very tempting and neither Russia nor China will feed the captured. Gulags will springing up for Slave Labor. Thank the Tri Laterals. Stop all Zionists fleeing the sinking ship.

After the new contract between Gazprom and CNPC was signed, the western media was quick to claim that Russia's gas giant would not be able to fund the pipeline needed to deliver natural gas to China.

Russia though has managed to find an ingenious way around the problem. According to Russian media, Gazprom's China pipeline will be financed by the state.

To a limited extent, the skeptics may have been right. For a company with a capitalization of roughly 100 billion dollars, financing a 55 billion dollar pipeline from Siberia to China would indeed be difficult. However, Gazprom is not an ordinary company because it can often count on help from its main shareholder, Russia. According to RIA Novosti, Alexey Ulyukaev, the economy minister, believes that the assets of the National Wealth Fund should be used to pay for the pipeline to China to be built. "It isn't a capital increase for Gazprom per se, but Gazprom can create an SPV for this particular project and the National Wealth Fund can invest in it", he told the press.

The National Wealth Fund is a Russian sovereign fund that manages surplus income from oil and gas exports. According to fund rules, at least 45% has to be invested in dollar-denominated instruments issued by the US Treasury or financial institutions like Federal Home Loan Mortgage Corporation (Freddy Mac) or Federal National Mortgage Assosiation (Fanny Mae). In order to help Gazprom built its pipeline to China, the National Wealth Fund would have to sell some of its dollar-based assets. Basically, the Russian government is swapping investments in American debt for investments in gas infrastructure to link Russia with China.